Your Down Payment

Lots of people who would like to purchase a new home qualify for various loan programs, but they don't have a lot of money to put up the standard down payment. Want to look into getting a new house, but aren't sure how to put together your down payment?

Tighten your belt and save. Scrutinize the budget to uncover extra money to go toward your down payment. There are bank programs through which some of your paycheck is automatically deposited into savings each pay period. Some effective approaches to build up funds include moving into less expensive housing, and staying local for your family vacation for a year or two.

Work more and sell items you don't need. Maybe you can find a second job and save your earnings. You can also get creative about the items you can put up for sale. Maybe you have desirable items you can sell on an online auction, or quality household goods for a tag or garage sale. Also, you might want to look into selling any investments you hold.

Borrow from a retirement plan. Investigate the parameters of your specific plan. Many people get down payment money from withdrawing from Individual Retirement Accounts or borrowing from their 401(k) programs. You will want to be sure you are knowledgable about any penalties, the way this could affect on your taxes, and repayment terms.

Request a gift from family. First-time homebuyers somtimes get help with their down payment assistance from giving parents and other family members who are eager to help them get into their first home. Your family members may be eager to help you reach the goal of owning your first home.

Learn about housing finance agencies. These agencies offer special mortgate loan programs- for moderate and low income borrowers, buyers interested in renovating a house within a specific part of the city, and additional groups as defined by each finance agency. Financing through a housing finance agency, you probably will get an interest rate that is below market, down payment help and other benefits. These types of agencies can help you with a reduced interest rate, get you your down payment, and provide other benefits. The principal purpose of not-for-profit housing finance agencies is to boost the purchase of homes in certain parts of the city.

Explore no-down and low-down mortgage loans.

• Federal Housing Administration (FHA) mortgages

  The Federal Housing Administration (FHA), which functions as part of the U.S. Department of Housing and Urban Development (HUD), plays an important role in aiding low to moderate-income families qualify for mortgage loans. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids homebuyers who need to get home financing. FHA offers mortgage insurance to the private lenders, ensuring the buyers are eligible for a mortgage loan. Interest rates for an FHA loan are generally the going interest rate, while the down payment for an FHA loan will be smaller than those of conventional loans. Closing costs might be financed within the mortgage, while your down payment might be as low as 3 percent of the total.

• VA loans

  VA loans are guaranteed by the U.S. Department of Veterans Affairs. Service persons and veterans can get a VA loan, which typically offers a reasonable interest rate, no down payment, and minimal closing costs. Although the mortgage loans don't originate from the VA, the office certifies borrowers by providing eligibility certificates.

• Piggy-back loans

  A piggy-back loan is a second mortgage that closes at the same time as the first. Usually the piggyback loan takes care of 10 percent of the home's price, while the first mortgage finances 80 percent. The borrower covers the remaining 10%, instead of putting the usual 20% down payment.

• Carry-Back loans

  In a "carry back" mortgage, the seller commits to loan you part of his own equity to assist you with your down payment funds. In this scenario, you would borrow the largest portion of the purchase price from a traditional lending institution and finance the remainder with the seller. Typically you will pay a slightly higher interest rate with the loan financed by the seller.

No matter how you gather your down payment, the thrill of living in your own home will be just as sweet!

Want to discuss your down payment? Call us: 8557558700.